* Baltimore suit accuses Wells Fargo of discrimination

* Suit says blacks targeted for loans they could not pay

* Wells Fargo denies discrimination, seeks dismissal

By Jon Hurdle

BALTIMORE, June 29 (Reuters) - Lawyers for U.S. mortgage lender Wells Fargo & Co (WFC.N: Quote, Profile, Research) urged a federal judge on Monday to dismiss a lawsuit by the City of Baltimore claiming the bank preyed on the city's black community with subprime loans that led to a flood of foreclosures.

U.S. District Judge Benson Legg said he would rule in coming days on whether to hold a trial on the first suit to be filed by a major American city alleging a mortgage lender violated the federal Fair Housing Act with predatory lending practices that exacerbated the U.S. housing market crash.

Separately on Monday, the U.S. Supreme Court ruled that the New York attorney general's office can investigate whether national banks discriminated against minorities seeking mortgages.

The Baltimore suit alleges that Wells Fargo discriminated against black borrowers by targeting them for high-cost subprime mortgages, even when some would have qualified for prime-rate loans.

The suit, filed in January 2008, claims Wells Fargo's policies in Baltimore led to a high rate of foreclosures in targeted neighborhoods, damaging the city's economy by reducing tax revenue and adding to police, fire and housing costs.